The present chairman of NHPC, Yogendra Prasad, has taken a series of initiatives in promoting hydel power projects in the country. He recently signed a series of MoUs with various states for undertaking implementation of hydro projects in tough geological areas.

Fighting procedural delays and other constraints, Mr Prasad has chalked out ambitious plans for NHPC. He spoke to Anupama Airy on his company's future plans and strategies. Excerpts:

Hydel power is the cheapest source of power. However, hydro projects in India have not contributed significantly towards generation capacity, and there is a still big mix-match between hydel and thermal generation. What is the reason for this and what steps should be initiated for increasing hydel power generation?
Hydro capacity, which was 508 mw at the time of Independence, has grown to 23,816 mw. However, the share of hydro, which rose to 50.62 per cent in 1963, has plummeted to less than 25 per cent now. The importance accorded to hydro power till 1963 was on account of priority given for the agricultural sector.

In the 70s, a shift in priority-from agriculture to industry-took place triggering concentration of coal-based thermal projects at the pit-heads. With a compulsion for rapid capacity addition, the priority for coal- and gas-based thermal projects assumed greater importance resulting in a decline in hydro development in states that faced paucity of funds.

Though hydro corporations were created, some in 1975 and others subsequently, the prerogative for entrusting the projects to these corporations rested with the state governments. Hence, these central corporations could not substantially contribute to hydro capacity addition as much as the thermal power stations. The trend is now changing with more and more states, like Punjab, Himachal, Madhya Pradesh, Tamil Nadu, Karnataka, Arunachal Pradesh, West Bengal and Bihar entrusting more and more hydro projects for execution by NHPC, either alone or as a joint venture with the state governments.

To accelerate hydro development, priority should be accorded by the central and state governments, and adequate funds should be released to the central corporations as equity.

As a long-term strategy, water should be treated as a national asset, like minerals and hydro development, and should be in the ambit of a central hydro corporation. This will also pave the way for implementation of projects now held up due to inter-state reasons.

What kind of new capacities can come by way of hydel power? This is important as the power ministry plans to generate additional one lakh mw of power in the next 10 years. What will be NHPC's contribution to this?
In the next 10 years, mega hydro projects that are under implementation will be completed and will start yielding the benefits. This will include ongoing projects, like Dhauliganga, Dulhasti and Chamera-II of NHPC; Tehri and Nathpa Jhakri, Ranganadi and Tuirial etc. of other central corporations.

Many new projects will be started in the next decade. These include Parbati-II, Teesta-V, Subansiri and Dihang and many others under consideration.

In the state sector, ongoing projects, like Pykara, Sri Sailam etc. will be completed. Not many new projects are visualised for take-off in the state sector. The capacity addition envisaged by NHPC is 31,385 mw by 2017.

Vis-a-vis countries like Canada, Norway, who are heavily into hydro generation, what needs to be done in India in terms of new technology and other related issues?
Countries like Canada and Norway having enormous hydro potential. Norway, which has the second largest oil reserves in the world, is solely dependent on hydro projects to meet all its requirements. In India, the vast hydro potential, if developed for the optimum hydro thermal mix, will impart the necessary acceleration that is required. The technology and techniques being adopted by NHPC and other organisations are state-of-the-art and modern.

Tardy hydro development is definitely not on account of any inferior technology or inefficient methodologies or poor project management.

You have been blaming the system for procedural lags. What should be done for timely completion of projects?
The inherent procedural delays in the existing system of sanctions, clearances and land acquisition are responsible for the long time being taken in hydro development from concept to completion. The procedure for statutory clearances, such as techno-economic clearance from the Central Electricity Authority and the ministry of environment and forests, are not conducive to speedy start of hydro projects. They do not seem to realise that they have a constructive role to play in power development and consequently the country's development.

The Land Acquisition Act and the procedure for actual release of land for construction of hydro projects, which need considerable extent of land, leads to substantial delay and contractual problems. These procedures should be critically reviewed and simplified.

NHPC has proposed a three-stage action plan to speed up clearances, enable advance action to be taken and reduce time for completion from the stage of initiation.

The government is planning to give limited generation to private sector players in the hydel sector. Under the scheme, private players will be asked to give competitive tariff rates and the lowest tariff project would be given the guarantee. Do you think this kind of completion is justified for hydro projects? Can tariffs be predicted for hydel projects?
There are a few hydro projects which have been under implementation in the private sector, namely, Baspa-II and Maheswar. These two projects would come under the existing notifications which envisage tariff determination based on capital costs. There is no concrete proposal to select independent power producers (IPPs) for hydro projects on the basis of the competitive tariff rates.

The completion cost of a hydro project cannot be computed with a fair degree of certainty at the beginning of the project in view of several changes that may take place during execution, and geological surprises that are inevitable. If competitive tariff is the basis, there should be a tariff cushion to take care of the contingencies.

Are you planning any new hydel projects through the joint venture route?
Some hydro projects, like Narmada Sagar and Omkereshwar in Madhya Pradesh, will be executed by the Narmada Hydro Development Corpn., a joint venture of NHPC and the MP government. Some other projects are also under consideration for joint venture execution. However, there is no concrete proposal for the joint venture route of execution for any other project.

The government had earlier proposed that smaller organisations like Neepco and THDC should be merged with NHPC. What is the progress on this front?
Merger of all hydro corporations under the NHPC umbrella has been figuring from time to time. However, there is no concrete proposal at present. NHPC is fully equipped should such a merger materialise.